Boulder medical marijuana industry navigating hazy rules -different deadline: boulder

Boulder medical marijuana industry navigating hazy rules - Boulder Daily Camera

Calling it unfair and arbitrary, a Boulder city attorney said Thursday that the city will not enforce part of a new state law that requires a yearlong moratorium on medical marijuana businesses that failed to meet a registration deadline Thursday.

But state officials said any business that tries to circumvent the rules could be shut down -- and forbidden from ever opening again.

The confusion being caused from such differing interpretations of the law has thrown Boulder's medical marijuana industry into chaos this week.

"It's all kind of up in the air," said Michael Bellingham, owner of the Boulder Medical Marijuana Dispensary, at 2111 30th St.

Bellingham, like most other dispensary owners across the state, was busy this week trying to comply with a new law that requires all medical marijuana businesses to provide proof by the end of the day Thursday that they are licensed and allowed to operate by their local governments.

Those that miss the deadline -- according to the state -- can't open until July 2011 because of a moratorium that's designed to give state officials time to catch up with the expected tsunami of applications.

But confusion over exactly what it means to be licensed by a local government, as well as different interpretations of the law, have Boulder officials saying they won't go after a medical marijuana business that makes a good-faith effort to follow the city's rules.

"We have no intention of enforcing the moratorium for the state," said Kathy Haddock, Boulder's senior assistant city attorney who advises the city on medical marijuana issues. "The state wrote their law so badly that I don't think that part's enforceable."

She said she doesn't think the state has legal ground to implement a moratorium at all.

"They did not put any grounds in the statute for doing a moratorium -- any findings that there was a problem that needed to be solved," she said.

But, she added, there's no easy way to tell who is right about that.

"I don't think we know, ultimately, until a court tells us," she said.

In the meantime, Haddock said the city will continue to follow the rules and timeline set out by the City Council earlier this year. The council decided that all any medical marijuana business needs to continue operating -- at least until the city completes a formal licensing system later this fall -- is a regular business sales-tax license.

Those owners who had a sales-tax license and were doing business before June 17 have until Oct. 31 to apply for a city-issued operating license that's specific to medical marijuana companies. Those that were operating without a sales-tax license must close until they get one, and then they have until Aug. 31 to apply for an operating license.

Mark Couch, a spokesman for the Colorado Department of Revenue -- which is overseeing the state's licensing process -- said sales-tax licenses, or whatever else a city requires to be an allowable business, were being accepted as proof of compliance in the absence of formal operating licenses.

Marijuana dispensaries and greenhouses that failed to provide evidence that they're legal in their respective cities, he said, won't be allowed to apply for a state license until next year.

"If they miss the application deadlines, they can't be licensed to operate," he said.

He said any medical marijuana business that tries to operate without a state license could be shut down and never allowed to get a license in the future.

Couch said application forms for a state license were still being reviewed Thursday by the Colorado Attorney General's Office. Those forms, which could be available as soon as today, are due by Aug. 1.

Applications for Boulder's operating licenses aren't yet available, but Alisa Lewis, Boulder's city clerk in charge of the program, said the office is "working as quickly as possible" to begin the process.

The confusion being caused by the slew of new regulations has some dispensary owners scrambling to make sure they're in the green with both the state and the city.

"The whole industry right now is confusing," said Lauren Meisels, co-owner of The Greenest Green, at 2034 Pearl St. in Boulder. "It's like a free-for-all. We're all trying to figure it out together."

Meisels said she's retained attorneys to help navigate the emerging bureaucracy.

"We're doing everything that we can to be in compliance," she said. "It's a waiting game -- waiting for the applications to come out and waiting for the licenses to come out."

Sarah Meiser, a manager at Boulder Vital Herbs, 2527 Broadway, said she called the Department of Revenue and explained that the business has a valid sales-tax license. She said the person who took her call said that was good enough, but she's unsure that anyone really understands what's expected.

"It's chaos," she said. "I was down at the city yesterday; there are people going crazy everywhere."

Meiser said there's also a rush to comply with another part of the state law that requires dispensaries to grow at least 70 percent of the marijuana they sell.

She said competition for space to grow the plant has led to greatly inflated rental rates at warehouses. Her company was only able to secure a growing location earlier this week, she said, at a rate of $6,000 a month for 4,700 square feet of space.

"That's the going rate," she said.

Facing high rent, new regulations and upcoming licensing fees from both the state and the city, Meiser said she's just hoping to stay in business.

"We've taken on a few friends who are investing," she said. "We're just cranking along and hoping the money will be there."

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Boulder Deadlines

Medical marijuana application timeline
Applications for a state license are due Aug. 1

Applications for a Boulder license are due Aug. 31 for businesses that did not have a sales-tax license by June 17.

Applications for a Boulder license are due Oct. 31 for businesses that did have a sales-tax license by June 17.